Investment planning is basically the process of matching your financial goals and objectives with your financial resources. Investment planning is a core component of financial planning. It is impossible to have one without the other. Investments without proper planning will create more confusion than solutions.Thus always be sure about your goal and the instruments that will help you achieve it. Here we will discuss do’s and don’ts of basic financial planning to create wealth by making important financial decisions.

Do’s:

1. Regular Investment: Every month, you should save a small percentage of your salary and the early you start more are the benefits, which will help you to create a great future.

2. Be Realistic: Investing is not just about seeking the highest possible returns. Consider your investment objectives to make informed, realistic investment decisions that will help you accomplish your financial goals

3. Follow a Detailed Plan: Develop a plan to eliminate the urge to buy or sell investments without careful thought. Write it down and set dates to review it periodically. Establishing your plan will help you in good times and bad, and it will help you scrutinize those wild tips you get from your favourite family member. You can start investing in Mutual Funds to create a corpus and then invest in other segments like Property, Gold and direct equity or capital market investments with a conservative approach may help you achieve your goal easily. But all these investment decisions need to be planned in advance and should be followed up thoroughly.

4. Your investment goals and time frames: Investment goals and time frame need to be appropriately chosen or else it can lead to disappointment

5. Make Clear-Cut Goals – This step will help you to take a call on various investment options. Also, it is important for you to maintain a balance between asset allocations because this will help you to avoid bringing down the entire pack even if there is an adverse effect on one asset class. Let us consider the following goals:

• Kid’s Future: Timely investments need to be on top priority when it comes to education and financially securing future of children. You should save at least fifteen percent of your savings for your child. You can always stay invested for the long run if you are investing early. Essentials while planning for kid’s future are investments in Gold, PPF, Equity Mutual Funds, NSC, ULIP and considering Recurring Deposits.
• Retirement Planning : It is important to take care of your future. Retirement can be a harsh truth but it is essential to plan for the same. We suggest you go for a diversified portfolio across PPF, National Savings Certificates, Stocks, Pension Plans and Mutual Funds. Always look at products that have a tax advantage for saving for long durations because you are investing for the long term.
• Estate Planning: Always ensure that you have a smooth transfer of your assets after your demise. Dreaming of the future cannot be enough and planning is what will make the dreams come true.

6. Your plans for diversification: Decide on the risks you are comfortable taking to achieve your financial goals. A diversified portfolio gives both safety and reasonably higher returns.

7. Keep updating your skills: Read financial articles and Newspapers, even the Financial Exchanges like Bombay Stock Exchange Limited (BSEL) and National Stock Exchange Limited (NSEL) have several courses to get educated and certified.

Don’ts

1. Avoid Trusting Others Blindly: This is your money. Think for yourself and research the expertise of anyone offering advice before you follow it. You should always do proper research before investing in any financial instruments also evaluate its pros and cons before entering into any such agreements. In case you are not capable of doing research then it is always better to take advice from a certified financial advisor who has rich experience in investing.

2. Avoid the Fairy Tales: If something sounds too good to be true, it probably is. Red flags should go up if anyone promises a large guaranteed return on an investment. People may misguide you for higher returns in short period but this may result in heavy losses as high reward comes only after higher risk.

3. Avoid Relying on Past Performance: Choosing investments on their past performance is like driving using only the rearview mirror. Past performance is an achievement, not a predictor of what will come in the future.

4. Avoid Borrowing to Invest: If your investment doesn’t pan out, then you still will owe the money you’ve lost to the lender. Rather, stick to your investment goals and set aside savings that you specifically designate for investing.

5. Avoid Holding Only One Investment: Changes in markets can happen quickly before you even can begin to react. Diversifying your portfolio will help to protect you during these swings, giving you time to make informed decisions. Making a balance investment approach and creating a mix of Equity, Debt, Real Estate and Commodities portfolio may help you achieve stable long-term growth instead of investing all your money into one fund or one asset class.

6. Avoid Flipping Stocks or assets, class: Trying to “beat the market” by frequently buying and selling stocks is a losing proposition. In fact, nearly major percent of day traders lose money. Buy Wisely and sell at the correct time is a winning formula

7. Avoid Getting Emotional: Having a plan and sticking to it can help you avoid mistakes and impulsive decisions. If you start making an emotional decision based on short-term development it becomes a big hindrance in reaching your long-term goal, so it is better to follow a disciplined approach with the long-term plan without any emotional change in you investing, this may help your investments to survive for a long term

To conclude this, we should always make a proper financial plan before investing and also take sound advice from experienced people to make and achieve our financial goals.

Founded in 2005 by new–age entrepreneur Abhishek Bansal, the Abans Group has evolved into a globally diversified conglomerate, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management. The Group is a comprehensive financial and non-financial services and solutions provider, aiming to provide end-to-end solutions to its clients.